The United States in January said it would designate the Houthis as a "Specially Designated Global Terrorist" as it aimed to cut off funding and weapons the group has used to attack or hijack ships in vital Red Sea shipping lanes.
But a senior U.N. aid official on Wednesday said the sanctions could harm the war-torn country's economy, particularly commercial imports of essential items. The U.N. says more than 18 million people need help in Yemen.
The attacks on ships, which the Houthis say are in solidarity with Palestinians in Gaza, have disrupted global commerce, stoked fears of inflation and deepened concern about the fallout from the Israel-Hamas war.
A U.S. State Department spokesperson said that the 30-day period from when Washington announced it would relist the Houthis as a terror group was used in part to give the Iran-backed rebels the opportunity to scale down their attacks.
Washington also worked with the shipping and financial industry as well as humanitarian assistance organizations to minimize the impact on the Yemeni people and make them aware of transactions that are allowed despite the sanctions, the spokesperson said.
The U.S. Treasury Department in January issued licenses authorizing certain transactions involving the Houthis, including those related to agricultural commodities, medicine and medical devices.
Former President Donald Trump's administration added the Houthis to two lists designating them as terrorists a day before its term ended. U.S. Secretary of State Antony Blinken revoked the designations days after taking office in 2021.
(Reporting by Daphne Psaledakis, Paul Grant and Susan Heavey, editing by Deepa Babington)
By Daphne Psaledakis
